COP29: The 'finance' COP

03rd December, 2024

The 29^th session of the Conference of the Parties (COP29) to the UN Framework Convention on Climate Change (UNFCC) was hosted in Baku, Azerbaijan from 11^th November to 22^nd November. The now annual COP’s present a critical opportunity for UN Member States to review progress and negotiate new measures to combat climate change.  

Dubbed the “finance COP”, António Guterres, the UN Secretary-General, urged states to agree a new climate finance goal noting, “The world must pay up, or humanity will pay the price. Climate finance is not charity, it’s an investment.”¹ After “hard fought” negotiations, COP29 closed with agreements on new climate finance goals, carbon markets, transparent climate reporting and adaptation.

This insight unpacks the key takeaways from COP29 that businesses need to know.

COP29 in a complex geopolitical landscape

COP29 unfolded in a complex geopolitical landscape, with multilateralism increasingly under fire. There was a renewed sense of urgency to build consensus around climate finance goals, with the looming threat of another US departure from the Paris Agreement following the recent election outcome. COP29 included diplomatic spats between France and host Azerbaijan, Argentina’s decision to withdraw from the negotiations² and a walk-out by climate vulnerable countries.³ Several countries also used the margins of the COP29 to broker deals, notably, the US and UK signed a new agreement for civil nuclear collaboration.⁴

Indeed, the COP process itself was challenged in a letter to the UN from senior figures including former UN Secretary General Ban-Ki Moon, former UN climate chief Christiana Figueres and former president of Ireland Mary Robinson.⁵ They flag the COP process as no longer fit for purpose, too slow, needing to move from negotiation to implementation, and should only allow host countries who support the phase out of fossil energy, "Its current structure simply cannot deliver the change at exponential speed and scale, which is essential to ensure a safe climate landing for humanity." The letter comes a few weeks after Papa New Guinea decided to to pull out of the climate summit due to frustration over “empty promises and inaction”.⁶

Minister Eamon Ryan led Ireland’s national climate delegation, made up of officials from across government and Ireland’s Climate Youth Delegate. Minister Ryan also played a key role in COP29 as  co-chair of the negotiations on climate adaptation with his counterpart from Costa Rica, Minister Franz Tattenbach. This is the first time that an Irish Minister has been appointed to such a position.⁷

New Climate Finance Goal

Finance has been one of the most consistently divisive issues in international climate politics and diplomacy. COP29 was no different. Nevertheless, a new agreement for climate finance was reached. The new goal will see developed countries raise $300bn a year for developing countries by 2035, tripling the previous goal agreed in 2009.⁸This new goal is the core of the “new collective quantified goal on climate finance” (NCQG), which nations agreed to establish by 2025 at COP21, when they adopted the Paris Agreement.

The goal of $300 billion annually has been met with disappointment from developing countries, as being a far cry from the $1.3 trillion experts say is needed. India, Bolivia, and Nigeria voiced particular concern about the level of ambition in terms of what is needed for the most vulnerable countries.

The second outcome struck in the final NCQG agreement attempts to address this $1.3 trillion gap. Instead, the text calls on “all actors” to scale up funds from “all public and private sources” to “at least $1.3 trillion” by 2035.⁹

UN Carbon Market 

After nearly a decade of work, on the opening day of COP, consensus was reached on standards for the creation of carbon credits and the establishment of a carbon market. The standards for the international UN carbon market are meant to guarantee that emission reductions and removals are verified and measurable. This agreement goes back to Article 6 of the Paris Agreement, which defines how countries can voluntarily trade and use carbon credits to meet carbon emission reduction targets set out in their nationally determined contributions.  While critics say carbon credits essentially allow major polluters to keep emitting carbon, it can enable important Climate Finance to be directed to developing countries¹⁰.  

UK reveals ambitious new climate goal

British Prime Minister Keir Starmer announced a new national target of reducing the countries carbon emissions by 81% before 2035 compared to 1990 levels. The target will form part of the UK’s updated National Determined Contribution (NDC) to the Paris Agreement. A significant share of this is planned to be achieved by investment in the clean energy transition, especially offshore wind. AT the end of September, the UK officially closed its last coal-fired power plant, becoming the first G7 nation to phase-out coal. During his COP statement, Starmer emphasized the UK’s commitment to global climate leadership and urged other nations to adopt ambitious targets¹¹.

Joint statement on EU and others’ National Determined Contribution (NDC)

In a joint statement the EU, Canada, Chile, Georgia, Mexico, Norway and Switzerland aim to submit their next NDCs consistent with: the IPCC emissions trajectories and the global stock take call for rapid and sustained reductions in greenhouse gas emissions in line with 1.5°C; absolute economy wide reduction targets covering all greenhouse gases, sectors and categories; and aligned with steep and credible emissions reductions toward their respective mid century net-zero goals¹⁰.

CDP and EFRAG announcements 

At COP29, CDP and EFRAG announced Extensive Interoperability between CDP Questionnaire and EU Sustainability Reporting Standards. 

The CDP and EFRAG cooperation is aimed at reducing the reporting burden for companies and creating efficiency in the environmental data ecosystem. Mapping efforts has shown a substantial commonality between the CDP questionnaire and the ESRS Climate Change standard (ESRS E1); CDP will also look to further strengthen the alignment of its questionnaire with ESRS E1 next year. A comprehensive mapping will be published ahead of the 2025 disclosure cycle¹¹.  

COP30 and COP31 

The next COP30 is expected to be hosted by Brazil from 10-21 November 2025 and both Australia and Turkey have bid to host COP31 the following year. 

How Davy Horizons can help

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